This is how steeks work. You're knitting the body of a sweater and get to the armholes. At that point, you bind off a few stitches at the armhole and cast on stitches above it--these extra stitches are the steek stitches, usually 8 or 10. As you knit around your sweater, you knit these, alternating the colors of the yarns you're using on that row so they get carried across.
What you end up with is this
You run two rows of machine stitching down the steeks to secure the stitches and then cut between them. (The 'old timers' didn't sew, but they were braver. Supposedly the wool used will not unravel so easily, but I feel more safe with the sewn rows.)
Then you do a three needle bind off at the shoulders. For the sleeves, you pick up stitches around the armhole and knit down.
I showed some of the steps here